Chase Eyes Purchase Of Major British Gold Dealer

Chase Manhattan Bank is considering acquiring Johnson Matthey Bankers Ltd., one of five major dealers that set daily prices in the London gold market, a Chase spokesman said Monday.

Chase is ``very interested in the gold bullion side of Johnson Matthey,`` the spokesman said. The gold bullion business has traditionally been Johnson Matthey`s most profitable operation.

A year ago the Bank of England mounted its largest financial rescue in nearly a decade for Johnson Matthey, which faced a growing portfolio of bad loans. The takeover was apparently aimed at ensuring the stability of London`s gold and financial markets.

The Bank of England said last week that it would soon be inviting bids for Johnson Matthey. An official of the central bank said inquiries have been received from 40 institutions.

But Chase and other would-be bidders are waiting to see Johnson Matthey`s books for the 15 months ended June 30. These will be contained in an memorandum soon to be sent to prospective buyers by British merchant banker Baring Bros. & Co., which is advising the Bank of England on the sale.

Johnson Matthey Bankers is a subsidiary of Johnson Matthey PLC, which injected $62 million in capital into the unit as part of the rescue arrangement. Charter Consolidated, a mining finance group with a 27.9 percent share in the parent company, also agreed to put $31 million of preferred stock in Johnson Matthey PLC.

Banking sources said the rescue package was put together to cover potential losses of about $186 million. The losses were attributed to inefficient lending practices.